Earlier this year, Tandem made its salary bands public. Taking this step wasn’t a snap decision — rather, it was a moment years in the making. In hopes that we can help other companies looking to increase salary transparency, we wanted to share our process that got us to where we are today.
Why Inclusion Matters to Us
At Tandem, diversity and inclusion are at the heart of our culture and success. Having representation at every level of our organization leads to longer retention, more fruitful projects, and more equitable employee benefits. Our clients (and our clients’ customers) have an array of life and business experiences, so having team members with similar experiences makes us stronger consultants. Without inclusivity, our work does not hold the same value.
Companies with more than 30% women executives are more likely to outperform companies with a lower percentage, and companies ranking in the top percentile of executive-board diversity outperformed those in the lowest percentile by 36% in profitability. We’ve noticed many facts like this in thought pieces highlighting the financial benefits of diversity and inclusion, and we think that’s great — but monetary gain is not why we care. We care because having diverse people makes our products stronger. Diverse people use our products, so diverse people should make them. Inclusion and diversity are part of our core values and lead us to do our best work.
Do you want to help make positive changes to the tech industry? Join our team!
How Salary Transparency Contributes to Inclusion
There is a long-standing struggle in the tech industry to create inclusive work environments for underrepresented groups of people, like Black, Hispanic, and female engineers. Even when they are hired, they are less empowered to negotiate for their salary and often make less money than their white male peers — meaning that salaries and job offers based on past earnings further disadvantage them.
According to LinkedIn, only 27% of HR professionals say their company currently shares salary ranges with employees or job candidates, even though salary gaps between genders disappear when salaries are made transparent. Better inclusion and representation throughout the organization helps manage power dynamics and ensures all voices are heard.
Tandem is a small company, but we still feel a responsibility to do our part to ensure salary equity. That’s why we decided to put all our cards on the table and eliminate any secrecy around compensation. We want to help create positive, lasting change in the tech industry.
The Road to Salary Transparency
At a company retro in February 2019, an engineering apprentice suggested salary transparency. As a group, we were excited about the idea! However, we knew we needed to do some work before we could do this well.
Step 1: Career Paths and Title Standardization
When Tandem was founded in 2011, we were just a couple of people who wanted to do good work. Over time, we hired more roles as we needed them. By the time we started working toward salary transparency in 2019, our org chart was a grab-bag of titles that all kind of made sense but didn’t have much consistency. It was clearly time for us to level up.
We conducted extensive research on other companies’ approaches to job roles and non-negotiable skills required for each position. While researching, we saw that some companies explained their interview process so candidates knew what to expect, which we liked and adopted into our postings. We also liked how companies were acknowledging imposter syndrome when encouraging candidates to apply, because it fits with our value of opening the door. Something we came across that we weren’t fond of was companies listing required degrees — we knew we didn’t want to make that part of our job descriptions because we are only concerned with whether a teammate can do the work well. This is another way to be inclusive and open the door to great job candidates without traditional backgrounds.
When drafting our job descriptions, we included technical and professional skills to reflect our value of both tech and consulting competencies within our career paths. Our team members don’t sit and code or design all day — they interact with clients, guiding them through projects and helping them solve business problems. Clarifying what skills are required to succeed at each level helps our job candidates and employees see where they fit and what is expected of them when aiming for a promotion.
Next, we took a look at our existing employees and figured out where each naturally fell on our drafted career path. In the process, we decided to add another level to avoid employees sitting in the middle for an extended period. After making that change, it was easy to re-title our existing team members within our new career paths. Step one complete!
Step 2: Salary Bands
After creating different levels, we could put a number to each of them. We looked at market data to create salary bands that were competitive and appropriate within each step of the career path. We wanted to create salary bands instead of strict salaries so that teammates had room to grow in salary as they grew in knowledge and experience, even if they weren’t yet ready for a promotion to the next job title. Some of our bands overlap with the preceding or next level to allow for variance in skill within that title. Each salary band is regularly evaluated against the job market and cost-of-living changes.
Instead of making management its own role, we decided to make it an add-on because we want any senior or principal consultant to be able to take on the additional responsibilities of a manager while continuing to progress within their salary band and their current engineering or design title. Because all managers are expected to have the same people-management responsibilities, their pay for those responsibilities should be the same — which is why we make the manager pay an add-on to their pre-existing role and salary.
Step 3: Ensuring Accountability
At this point, we were happy with our career paths and had been using them for a while. But we didn’t want to assume that we hadn’t inadvertently allowed bias to influence pay, especially since there is room for variation within each salary band.
For accountability, we hired an independent data analyst to conduct a pay equity audit. We were hoping that everyone was already making the correct amount for their level, but if the data showed that they weren’t, we were going to fix that immediately. The analyst was given two datasets: one from Tandem’s 2018 employees, and one from Tandem’s 2020 employees. In our historical audit from 2018, the anonymized data given to the analyst had any identifiers removed and was limited to just the fields required for hiring, which are date of birth, legal sex, and salary. In 2020, we wanted to expand to have self-disclosed fields so we sent out a survey to all employees with optional questions on gender identity, race/ethnicity, sexual orientation, disability/health status, marital status, and whether or not the employee cares for dependents.
Here’s what our 2020 audit showed:
- When comparing gender*, the auditor did not find a significant difference in salary
- When comparing race, the auditor did not find a significant difference in salary
- For other dimensions of identity, we didn’t have enough data to make a good analysis, but for future audits, this is something we’d like to grow
Our auditor concluded that all Tandem employees were being paid fairly based on their skill and tenure.
*Note: For the purposes of this audit, we needed to use historical data from our HR platform, Zenefits, which expresses gender as a binary male or female option. We know this is an incomplete representation of the gender spectrum, but given the limitations of the data, we still believe this is a valuable metric.
We were gratified to learn that we were already on the right track. Moving forward, we’re committed to conducting independent audits every two years.
At Tandem, advocating for diversity and inclusion never stops. With our core values, apprenticeship program, and quarterly full-team retros, we are committed to creating a space where everyone thrives. That’s why we made our salary bands public and committed to conducting a biennial equity audit. We know it takes more than one action to create the cultural change that is necessary for the tech industry, but we’re proud to take this step in making a software career more inclusive for everyone.
Do you want to help make positive changes to the tech industry? Join our team!